Lovells’ management is to push forward with further changes to the firm’s partner remuneration structure, as the top ten City firm’s lockstep review enters a third and final phase.
The remuneration committee has circulated a discussion paper with three separate proposals to partners today (2 November) in advance of the firm’s partnership conference in Barcelona later this month (10-12 November).
The most controversial recommendation is to give the firm’s US practice the flexibility to pay, in exceptional circumstances, both existing and lateral hires outside the range permitted by Lovells current lockstep ladder.
The committee is also in favour of giving Lovells’ partnership council powers to increase the profit share of exceptional performers among the partnership. This would entail awarding additional points to some partners and the creation of an additional band of points above the top to the existing lockstep.
Lovells lockstep historically ran from 24 points to 60 points, with an increase of three points every year over 12 years. However, as first reported on www.thelawyer.com (9 August), the partnership council agreed over the summer to increase entry level points to 30.
The final proposal is designed to attract big-hitting lateral hires by allowing a one-off upwards adjustment of points allocated to those partners.
Lovells radically overhauled its remuneration at the start of the year, which gave the firm powers to move underperforming partners down the equity ladder or to freeze them on certain points, with the agreement of the partners concerned.
That move followed a 14-month long review, which at the time showed there was very little appetite for adopting a system that encompasses a bonus pool or a global super-points system to reward outstanding revenue generators.